Food Corporation Of India vs Ace Integrated Solutions And Ors

Court
Delhi High Court

$~42
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 14730/2025 and CM APPL. 60461/2025

Date of decision: 11.05.2026
IN THE MATTER OF:-
FOOD CORPORATION OF INDIA .....Petitioner
Through: Mr. Purushottam Sharma Tripathi,
and Mr. Prakhar Singh, Advocates.

versus

ACE INTEGRATED SOLUTIONS AND ORS .....Respondents

Through: Mr. Jasmeet Singh, Mr. Mahinder
Singh Hura, Mr. Saif Ali, Mr.
Pushpendra S. Bhadoria, Mr. Ajith
Williyam S. Mr. Vijay Sharma, Mr.
Pranav Menon, Mr. Saurav, and Mr.
Mehul Pant, Advocates for R-1.
Mr. Anubhav Gupta , Panel Counsel
(Civil) GNCTD, Mr. Kartik Sharma,
Advocates for R-GNCTD.

CORAM:
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
J U D G E M E N T

PURUSHAINDRA KUMAR KAURAV, J. (ORAL)


1. The present petition seeks for the setting aside of order dated
17.11.2022 (“ Impugned Order ”) passed by respondent no.2-Micro and
Small Enterprises Facilitation Council, New Delhi (“ Council ”), under
Section 18(3) of the Micro, Small and Medium Enterprises Development
Signature Not Verified
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:15.05.2026
16:11:31

Act, 2006 (hereinafter “ Act ”), whereby the dispute raised by respondent
no.1 has been referred to the Delhi International Arbitration Centre
(„ DIAC ‟).
2. The sole ground raised by the petitioner to assail the Impugned
Order is that the contract was entered into between the petitioner and
respondent no. 1, prior to the date on which respondent no. 1 registered
itself as an MSME. It is his case that the Impugned Order referring the
parties to arbitration is impermissible in law.

3. The issue raised in this petition is no longer res integra . The
Supreme Court in the case of NBCC (India) Ltd. v. The State of West
1
Bengal & Ors. in paragraph no.5 has framed the following question:-
“5. Issue for our consideration : The question of law for our
consideration is whether an MSME cannot make a reference to the
Facilitation Council for dispute resolution under Section 18 of the Act if
it is not registered under Section 8 of the Act before the execution of the
contract with the buyer.”

4. The aforesaid question has been answered in paragraph no.15
thereof, which reads as under:
“15. Having considered the definition of the expression „supplier‟, and
also having considered the classification of enterprises into micro, small
and medium with respect to each of which there is a separate legal
regime to be suggested by the Advisory Committee and notified by the
Central and State Governments, and in view of the discretion specifically
vested with the micro and small enterprises for filing a memorandum
under Section 8 of the Act, the submission that the Facilitation Council
cannot entertain a reference under Section 18 if the enterprise is not
registered under Section 8 must be rejected.”

5. It is clear that the fact of an MSME being unregistered, at the time
the contract was entered into, or when the alleged invoices were issued,

1
2025 INSC 54.
Signature Not Verified
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:15.05.2026
16:11:31

is immaterial to the jurisdiction and powers exercisable by the Council
under Section 18 of the MSMED Act. Same was the view taken by this
Court in Sadbhav Engineering Ltd. v. KGTS Engineering India Pvt.
2
Ltd. , NTPC Ltd. v. Micro and Small Enterprises Facilitation Council
3
and Ors. , Bharatiya Rail Bijlee Company Ltd. v. Micro and Small
4
Enterprises Facilitation Council and Ors. , Environment Planning and
Coordination Organization Virology v. M/s Suresh Goel and
5
Associates and Ors. , Lalit Narayan Mithila University v. Delhi
6
International Arbitration Centre and Ors. , Sugam Technocrats Pvt.
7
Ltd. v. Micro and Small Enterprises Facilitation Council and Ors. ,
8
Municipal Corporation of Delhi v. M/s Vijay Bansal , Sadbhav
9
Infrastructure Project Ltd. v. VCS Enterprises Pvt. Ltd. and Ors. ,
MNV Industries Ltd. v. Chairman Micro and Small Enterprises
10
Facilitation Council and Anr ., and Municipal Corporation of Delhi v.
11
M/s Vijay Bansal , Richa Global Exports Pvt. Ltd. v. Delhi
12
International Arbitration Centre and Ors. Importantly, the order of
this Court in M/s Vijay Bansal (supra) was affirmed by the Division
13
Bench in Municipal Corporation of Delhi v. M/s Vijay Bansal.

2
W.P.(C)13095/2023; order dated 13.01.2026.
3
W.P.(C) 5195/2021; order dated 22.01.2026.
4
W.P.(C) 8669/2021; order dated 22.01.2026.
5
W.P.(C) 12469/2024; order dated 11.02.2026
6
W.P.(C) 2249/2026; order dated 17.02.2026
7
W.P.(C) 2603/2026 ; order dated 25.02.2026
8
W.P.(C) 12308/2023; order dated 25.02.2026
9
W.P.(C) 13030/2023; order dated 18.03.2026
10
W.P.(C) 10895/2024; order dated 21.04.2026
11
W.P.(C) 12308/2023; order dated 25.02.2026.
12
W.P.(C) 14435/2024; order dated 28.04.2026.
13
L.P.A 267/2026; order dated 15.04.2026.
Signature Not Verified
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:15.05.2026
16:11:31

6. In view of the aforesaid, this Court does not find any reason to
interfere with the Impugned Order.
7. The rights of the petitioner and the respondents with respect to all
other submissions stand reserved. They shall be entitled to contest the
matter on merits.
8. So far as the submission made by the petitioner that fraud vitiates
everything and in the instant case, an FIR has been registered by the CBI
is concerned, it is pointed out by learned counsel for the respondents that
the petitioner has taken all those pleas before the Arbitrator. The Court
finds that all aspects, including those aforenoted, will have to be looked
into by the concerned Arbitrator.
9. Leaving all those objections open, the instant petition stands
dismissed.

(PURUSHAINDRA KUMAR KAURAV)
JUDGE
MAY 11, 2026
Nc







Signature Not Verified
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV
Signed By:NEHA CHOPRA
Signing Date:15.05.2026
16:11:31